Labor Statistics and Wealth

We added 290,000 non-farm jobs in April, according to the Bureau of Labor Statistics (BLS) (Table 1; May 7, 2010 release). That is great news overall.

59,000 jobs were Governmental jobs. With the census happening right now, that's not unrealistic.

That also means the private non-farm sector added 231,000 new jobs. That is great.

So, what am I doing here right now?

Well, we added 59,000 governmental jobs. The Post Office lost 4,100 jobs. Excluding education jobs, local Government grew by 500 jobs. Local/State government job changes were (1,000)/(5,000) respectively. That is, local and state governments lost jobs. So, Local and State Government job losses were 6,000 jobs and USPS lost 4,100 jobs, but we had a net gain of 59,000 jobs. Federal job gains totaled 69,100 new jobs. There were 66,000 census workers hired in April according to this BLS report.

3,100 new jobs in the Federal Government, not including census workers. I wonder when the hiring will stop there.

Private sector hiring: 231,000 new jobs.

Service-Providing Sectors: 166,000 new jobs.

Goods-Producing Sectors: 65,000 new jobs.

Where does wealth come from?

Does Service-producing jobs produce wealth?

Do Goods-Producing jobs produce wealth?

Do Governmental jobs produce wealth?

I'm of the mind that Government jobs destroy wealth. Sure, they are responsible for basic things like protecting the country from invasion. Invasions can definitely put a crimp on wealth production, but they aren't really creating wealth.

Does the Federal Reserve create wealth? I would say they might create wealth, but it's not real wealth, but paper wealth. On paper, wealth rose.

Look at the Real Estate Bubble. Buy a home now, wait 15 minutes and the value of your home just went up 10%. Okay, so it wasn't that much or that fast. But was that real wealth? When the bubble burst and housing values reset, what were you left with?

For all those unfortunate souls who are now underwater on their mortgages, did they create all that wealth and lose it just as quickly? Or, was it just paper wealth that was worth paper, but not really worth anything? Timing is everything, isn't it?

Goods-producing jobs create wealth. Goods are that wealth. That's where it all has to start. You don't see people sitting down and spending money to eat a head of lettuce, a carrot, a cucumber, a tomato, some vinegar, oil, sugar, water, salt, pepper and herbs, do you? No, you see people buying the salad and dressing; the Goods. Does the waiter or waitress have a job if there is no food? Until the computer system is built, what's an IT professional to do?

How does a company pay for that IT pro, accepting that they have that computer system? They transfer a bunch of paper according to the contract between the company and the IT pro. Well, either they sold a service, or sold some goods they made. In the former, they were paid by a company that either sold a service or sold some goods. Trace it back far enough and you'll see that it starts with someone making something. Everything after that is just transferring the wealth created by that Good.

Does this production have to be in the US? Not really. It sure helps, but it isn't required as long as we can get those products here. The more Goods are produced here, the more wealth will be created here. The more that's outsourced, the less actual wealth we have here.

Adding 65,000 goods-producing jobs is good, but it's going to be really difficult to maintain the growing number of Governmental employees when they are gaining more jobs than the Goods-Producing sector of the economy.